But atypicals are significantly more expensive. NICE has estimated the decision could increase the NHS's medicines bill by around £70m.

Second-class citizenship for people with severe mental illness is no longer an option

Cliff Prior, NSF

Campaigners estimate that, at the moment, just 20% of people with schizophrenia who could benefit from the drugs actually receive them.

Around 210,000 people could become eligible for the drugs because of the decision.

Mental health campaigners have also welcomed NICE's statement that which medicine people with schizophrenia should be a joint decision between the doctor and the patient.

Side effects

NICE has also said atypical medicines should be used for people newly diagnosed with schizophrenia.

Those with treatment resistant schizophrenia should be given clozapine "at the earliest opportunity".

The NHS must ensure that the most clinically and cost effective drugs are available for service users

Lord Hunt, Health Minister

The old type of drug costs around £70 a year whereas the atypicals cost around £1,220.

But there would be savings made because there would be reductions in hospital admissions.

Anne-Toni Rodgers, NICE communications director, said: "NICE estimates the increase in drug costs to the NHS, in England and Wales, will be about £70m per year.

"However, the use of these newer medicines is expected to result in a shift away from inpatient hospital care to residential or community care, which is less expensive.

"Ten years ago it was estimated that the indirect costs of schizophrenia in the UK were about 1.7 billion pounds.

"If the use of these newer agents, alongside the more traditional medicines, enables more individuals with schizophrenia to live independently there could be substantial savings to the economy as a whole".

Bodies in the NHS which hold the purse-strings, such as Primary Care Trusts (PCTs), will have to implement NICE's decision, but campaigners say mental health services would have to receive extra funds so other patients do not miss out.

The National Schizophrenia Fellowship (NSF) has surveyed people using the drugs.

It found 92% had experienced side effects from older drugs - such as muscle spasms, shaking and weight gain.

The drugs had affected 43% of people's ability to carry on with everyday life "a lot".

Almost half of those using the older type drugs had stopped taking their medication at some point without talking to their doctor, compared to just one in three on the newer medications.

'Clear guidance'

Cliff Prior, chief executive of the NSF, said: "People have been telling us for years that old-style 'typical' medicines had severe unacceptable side effects but they were denied choice by cost restrictions.

"Now NICE has come out with clear guidance that cannot be ignored.

"People must be involved in the decision-making about which medicines they use and be offered a choice to suit them.

"From today, only the best will do. Second-class citizenship for people with severe mental illness is no longer an option."

"The government has a duty to foot the bill so that its plans to raise standards across mental health services stay on course.

Marjorie Wallace, chief executive of SANE, said: "To date, people have not been given the choice of medication for schizophrenia, leaving many to struggle with the stigmatising and damaging side-effects of the older medications.

"The newer drugs may have their own side-effects, but we have lobbied for them to become more widely available because it is our experience that they enable many more people with psychotic illnesses to lead a more fulfilling life."

Jayne Zito, founder of The Zito Trust, said: "Schizophrenia places a tremendous burden on all involved, so it's great news that people with schizophrenia should now have access to the best treatments, as there are large discrepancies currently.

However, she said the guidance would only be a significant step forward if resources were made available by the government to ensure that the recommendations can be implemented across the country.

Health Minister Lord Hunt said: "Improving mental health services is a key government priority and the NHS must ensure that the most clinically and cost effective drugs are available for service users."